The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App

Daimler Rebounds To Profit, But Less Than Expected

BERLIN (AP) - Daimler AG earned euro1.05 billion ($1.4 billion) in the fourth quarter as revenue rose by nearly a quarter - capping a year in which a recovering global market and strong Chinese and U.S. demand helped the German car maker rocket back into the black.

The October-December earnings reported Wednesday contrasted with a loss of euro348 million a year earlier - but they also came in short of analysts' forecasts, causing Daimler's shares to slide 2.8 percent to euro54.40 in Frankfurt trading.

Earnings per share, which were expected to reach euro1.25, came in at euro0.99.

The maker of Mercedes-Benz cars and trucks saw revenues rise 24 percent to euro26.4 billion from euro21.32 billion, slightly above expectations.

Full-year net earnings rebounded to a euro4.5 billion profit from a 2009 loss of euro2.64 billion, on revenues that also rose 24 percent to euro97.8 billion from euro78.9 billion.

Earnings before interest and taxes totaled euro1.56 billion for the quarter - an increase of nearly 250 percent - and euro7.27 billion for the full year, compared with a loss of euro1.51 billion in 2009.

The company said it plans a dividend of euro1.85 per share this year after foregoing a dividend payment for 2009.

"Daimler managed an excellent comeback last year," CEO Dieter Zetsche said.

"Our goal now is to maintain the level we have reached over the long term and to further improve it wherever possible," he added. We have the right products, technologies and strategies to do so."

Daimler, which is based in Stuttgart, expects revenue to grow at "a more moderate rate" this year and EBIT, or pre-tax earnings, to come in "significantly in excess" of the 2010 level.

The company said it expects high spending this year on new products and technologies and to penetrate new markets, as well as rising prices for oil and raw materials in the wake of the global economic upturn.

It said exchange-rate volatility likely will remain high, but the company already has largely hedged the resulting risks for this year.

The net liquidity of Daimler's industrial business was euro11.9 billion at the end of the year, euro4.7 billion higher than a year earlier - cash that the company appears keen to hold on to at least in the short term.

"We are still in a very volatile situation," chief financial officer Bodo Uebber said at a news conference. "So I think it is beneficial for the moment to sit on this liquidity and keep it in the company."

Uebber wasn't forthcoming on the future of Daimler's stake in European Aeronautic Defence & Space Co., the parent company of aircraft manufacturer Airbus. It holds 22.5 percent of the voting rights and 15 percent of the equity.

He noted that the existing share structure was extended in principle through 2012 a year ago, but said there will have to be discussion of a "long-term oriented" structure that is "sustainable and balanced."